Veterinary Marketing: Measuring the Return on Investment (ROI) of Your Digital and Traditional Advertising
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” – John Wanamaker
For a private practice, advertising is crucial to maintain healthy new client growth numbers that achieve sustainability and hopefully growth. There is little argument that measuring the ROI with digital marketing is much easier than with traditional advertising, such as print, PR, Yellow Pages, mailers, etc. Too many traditional campaigns fall into the trap of being unmeasured or under-measured even though there are affordable solutions to track the impact of most advertising campaign dollars.
This article will present case studies that provide actionable measuring techniques to assess advertising impact and ROI through free or affordable services that, although advanced in their efficacy, are quite attainable and easy to implement. The following measurement techniques will be discussed:
- Landing Pages and Google Analytics
- Call Tracking and Monitoring
- Calculating CPA and Cutting The Fat
Landing Pages for Conversions
Dr. Baker owns a two-doctor practice and just built an addition in order to provide enough space for boarding. She decides that she is going to run an ad on her local Patch.com community webpage that links to her homepage and focuses on their new boarding service. Like many local publishers, Patch.com doesn’t provide conversion analytics and she is paying a rate based on “Cost Per Mile” – a fee per thousand views/impressions. She has Google Analytics set up on her website but she can’t tell if the ad is driving visits to her website.
If you could do only one thing to drastically improve the marketing ROI of advertising, adding landing pages to your website would be a good bet. Landing pages are single web pages that appear in response to clicking on an ad or a search engine result that are a logical extension of the ad or search term. For example, if you type “golf clubs” into Google, Golfsmith.com has the number one ranking with a landing page that is not their homepage, but rather a dedicated page discussing its selection of clubs. If your practice is like most other practices pushing advertising, email marketing, and social media traffic to their website homepage, you are missing out on a sure way to increase the odds of converting that traffic into customers.
In this example, if a person is interested in boarding their pet, they will click on the ad about boarding and be brought to the homepage of a veterinary hospital. The content at the destination is not targeted to fill the needs of that potential customer. If a landing page is provided that has a great pitch about the boarding services, it will not only increase the likelihood of a sale, but Google Analytics can be used to measure the traffic being generated from the advertisement and shed light on of the ROI of you’re the ad campaign.
Are My Ads Converting Prospects into Clients? Using Call Tracking to Assess Advertising ROI and Customer Service
Dr. Nash has a practice near a high-end gated community with a favorable demographic. He has a competitor in the shopping center right next to the gate at the community entrance and he suspects that this is providing them a huge competitive advantage. Dr. Nash offers more comprehensive services, such as acupuncture, laser therapy, and rehabilitation but it has been difficult to get the word out to that community. He decides to advertise in the community’s publication and the local newspaper. He has no idea if these advertisements are driving business to his practice.
Dr. Nash didn’t know that he could use a call tracking service to create virtual phone numbers that redirect to the reception desk. By assigning a different phone number to each of his ads (Yellow Pages, Newspaper, Pay Per Click Landing Pages, etc.), he could assess whether or not his ads are driving business and cut the ads that are ineffective (which would more than pay for the call tracking). Call tracking analytics can be accessed through an online dashboard and there is even the option for the system to announce to the receptionist what ad the call originated from prior to answering the call.
Call tracking can even go to another level in providing analytics around how effective team members are at customer service. Customer service performance metrics can be attained and used to identify problems at the reception desk by having incoming calls recorded and graded on specific criteria by the call tracking service. Call tracking can be set up through out company.
Calculating Cost-per-acquisition (CPA) for Advertising Campaigns – It is Time to Cut the Fat
Now that you are able to estimate the revenue from your print ads and your digital campaigns through landing page analytics and call tracking, you will want to calculate the CPA for those campaigns. Let’s pretend you are evaluating your advertising dollars spent on the Yellow Pages.
A Yellow Pages ad for your practice cost $2000 per year and the call tracking data shows that it produced 50 calls. Because you have a call-tracking dashboard, the office manager can cross-reference the inbound phone numbers on your practice management software to see what percentage of calls led to new clients. As it turns out, 10 of those became new clients.
You can then do a ballpark estimate of the client lifetime value (LTV) by using this equation; (Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Years for a Typical Customer). As it turns out, the gross LTV for your practice is $850 and since your margins are 20%, the net profit LTV is $170. The value of those 10 clients is therefore $1700 in net profit (10 x $170).
Cost-per-acquisition calculations allow you to focus primarily on how your advertising costs compare to the number of client acquisitions those costs yield. Using this example, the ad cost $2000 and resulted in 10 clients, therefore the CPA for that ad is $200. The CPA shouldn’t exceed the profit made from each client acquired. In this example, the CPA is 15% higher than the net profit that the ad created and therefore, you should second-guess renewing your Yellow Page ad in the next sales cycle.
Putting It All Together
If you create unique landing pages with relevant content for each advertisement and assign a unique phone number to each ad through call tracking, assessing the ROI of your advertising dollars becomes way more scientific than the “where did you find us” box on your new client sign-up form. These marketing analytics will also solve the problem of a client writing “newspaper” and you having ads in multiple newspapers or writing “online”, which could mean your website, Google Maps, a PPC ad, etc. You will be left with one problem, however; what are you going to do with the freed-up funds in your new advertising budget?